Randy Cohen & Michael Green: How Concerned Should We Be About Index Funds? | Rational Reminder 332

Описание: Meet with PWL Capital: https://pages.pwlcapital.com/en-ca/co...

Are index funds a silent disruptor? Or are the concerns overblown? In this grab-your-popcorn episode, Michael Green returns to the show after his previous appearance elicited a wave of compelling feedback from listeners. These included very smart individuals in academia and practice who were interested in hearing a counter perspective. Joining Michael today for a lively debate is Randolph Cohen, Senior Lecturer of Entrepreneurial Management in the Finance Unit at Harvard Business School. In our conversation, Michael shares his deep concerns about how index funds and target-date funds might be distorting financial markets, honing in on the tension between market efficiency and price elasticity. Randolph counters with an academically grounded perspective, drawing on his PhD and years of research and teaching at one of the world’s leading business schools. With Ben and Cameron moderating, the discussion explores both sides without reaching a definitive conclusion. Tune in to witness this spirited, nuanced exchange and decide where you stand!

Timestamps:

00:00:00 Intro
0:07:35 Defining Passive Investing
0:12:23 How Much of the Market Held by Passive Investors
0:15:22 Describing Concerns About the Rise of Passive Investing at a High Level
0:24:24 Three Pieces of Evidence Supporting Their Views
1:37:13 The Cross-Sectional Impact on Stock Valuations from Index Investing
1:47:10 The Implications for End Investors
1:53:40 What a Typical Retail Investor Should Think About Doing with the Information Covered
2:04:24 Why Industry and Academia Don't Share Mike's Level of Concern
2:07:38 Where Randy Lands on the Rise of Passive After Hearing Mike's Concerns
02:16:15 Addendum

Links From Today’s Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/t....
Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram —   / rationalreminder  
Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder
Rational Reminder on YouTube —    / channel  
Rational Reminder Email — [email protected]
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn —   / benjaminwfelix  
Cameron Passmore — https://pwlcapital.com/our-team/
Cameron on X — https://x.com/CameronPassmore
Cameron on LinkedIn —   / cameronpassmore  
Michael Green on Substack — https://substack.com/@michaelwgreen
Michael Green on LinkedIn —   / michael-green-9a15142  
Michael Green on X —   / profplum99  
‘Yes, I give a fig… Thoughts on markets from Michael Green’ — https://www.yesigiveafig.com/ Randolph Cohen — https://www.hbs.edu/faculty/Pages/pro...
Randolph Cohen on LinkedIn —   / randy-cohen  
Dangerous Visions Podcast — https://podcasts.apple.com/us/podcast...
Episode 302: Michael Green — https://rationalreminder.ca/podcast/302
Episode 322: Marco Sammon — https://rationalreminder.ca/podcast/322
Episode 310: Antoinette Schoar — https://rationalreminder.ca/podcast/310
Episode 212: Ralph Koijen — https://rationalreminder.ca/podcast/212
Episode 314: Valentine Haddad — https://rationalreminder.ca/podcast/314
Episode 224: Scott Cederburg — https://rationalreminder.ca/podcast/224
Episode 284: Scott Cederburg — https://rationalreminder.ca/podcast/284

Books From Today’s Episode:

Irrational Exuberance — https://www.amazon.com/Irrational-Exu...

Papers From Today’s Episode:

‘The Disappearing Index Effect’ — https://papers.ssrn.com/sol3/papers.c...
‘Passive Investing and the Rise of Mega-Firms’ — https://papers.ssrn.com/sol3/papers.c...
‘Retail Financial Innovation and Stock Market Dynamics: The Case of Target Date Funds’ — https://papers.ssrn.com/sol3/papers.c...
Valentine Haddad on Google Scholar — https://scholar.google.com/citations?...
‘How Competitive is the Stock Market? Theory, Evidence from Portfolios, and Implications for the Rise of Passive Investing’ — https://papers.ssrn.com/sol3/Papers.c...
‘Household Portfolios and Retirement Saving Over the Life Cycle’ — https://papers.ssrn.com/sol3/papers.c...
‘The equity premium: A puzzle’ — https://www.sciencedirect.com/science...
‘In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis’ — https://papers.ssrn.com/sol3/papers.c...